Two years ago, First Lady Michelle Obama launched the Let’s Move campaign, a comprehensive effort focused on improving the health of the nation’s children. One component of the campaign involves the meals that children receive at school. Considering that over 31 million children participate in the National School Lunch Program and another 11 million participate in the National School Breakfast Program, the effort to include more fresh fruit and vegetables in school children’s meals is having a major impact on schools and their foodservice providers.
An A+ for Gold Star Foods
Gold Star Foods is a foodservice company whose clients include several of the country’s largest school districts—Los Angeles Unified School District, and the state of Arizona’s Mesa Public Schools.
“We’ve definitely gotten more involved with fresh fruits and vegetables because of this mandate,” confirms Greg Johnson, CFO for Gold Star Foods. Although the Let’s Move campaign is rolling out in phases, many school districts have begun adopting the guidelines relating to children’s lunches before the requirements become mandatory.
Although most agree that the goal is laudable, the impact of the campaign is being felt throughout the supply chain.
Compared to restaurants, which typically have ample storage for large amounts of food, an average school cafeteria is often pressed for space, explains Johnson. “At one end of the spectrum are school districts that have all their meals prepared in a commissary type of situation, which are then distributed to individual schools. At the opposite end are schools that make everything on site. However, most schools fall somewhere in between these two models.”
That means that many schools are highly reliant on their foodservice provider to deliver the food they need, when they need it. The addition of more perishable foods to the mix makes frequent deliveries even more necessary.
Not only are schools dependent upon a foodservice provider’s transportation abilities, the accounting aspect is also very important, says Johnson.
“This particular business is very unique in the foodservice industry because school lunch programs are highly subsidized by the federal government,” he says. For instance, each year the federal government provides commodity products, like cheese, to schools throughout the U.S., which can use it directly or divert it to a manufacturer, who will then use it in a food product, such as a cheese pizza.
According to Johnson, it can become very complicated to keep track of these commodities, and what’s more, it’s such a critical piece of information for schools.
“Obviously, the school districts are concerned about the accuracy of this information because it’s their product, and if they don’t get what they’re entitled to they are losing money.” In addition, some foodservice providers aren’t able to offer an inventory tracking service to their customers, and for those that do, not all of them can do it as well as Gold Star Foods, says Johnson.
Managing costs has become an even bigger issue for school districts with the pending implementation of the Let’s Move campaign, Johnson says, because the federal government is only partially funding the program. It’s estimated that schools will have to pay about 26 cents more per meal to comply with the new guidelines, but the federal government is only kicking in about 6 cents of that additional cost.
“Schools are really getting pinched financially,” Johnson emphasizes.
To better assist their school district customers with the new requirements, Gold Star Foods also invested in their own operations. For starters, the company built a new 117,000 square foot warehouse in Ontario, California, which it moved into last year. C&L Refrigeration designed and built the facility, which features a state-of-the-art refrigeration control system; ultra low-noise and energy efficient air units; and 100 percent steel piping to maximize reliability. The entire facility was also designed above the required California Title 24 Energy Efficiency Standards, which allowed Gold Star to qualify for a sizeable rebate incentive from their local utility company.